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The trendline shows the change in the inflation rate (y) as a function of the unemployment rate (x). If the inflation rate does not
The trendline shows the change in the inflation rate (y) as a function of the unemployment rate (x). If the inflation rate does not change, y=() (that's a zero change in the inflation rate from one year to the next). The unemployment rate that makes y=(), then, must be the unemployment rate at potential output! 1 Look for the point where the trendline crosses the zero inflation change on the graph. What is the unemployment rate at that point? That's the unemployment rate you're looking for. Or, do the calculation with the equation. Set and solve for x using the equation. Your algebra teacher said some day all that algebra would be useful. Today's the day! Be sure to multiply by 100 (or click the "0/0" format button) to put your answer in percentage terms.
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